A DAMNING report on the funding of EDF Energy's proposed £16billion nuclear power station at Hinkley Point has been branded 'interference'.

The 70-page European Commission report, published on Friday, argues a subsidy deal between EDF and the Government for the new plant may constitute illegal state aid.

The Commission vice-president Joaquín Almunia wrote to Westminster following its decision to launch a state aid investigation, saying the Government should not be handing over such huge subsidies to the French firm.

The Commission says consumer-funded subsidies, that could total £17.6 billion, risk giving EDF excess profits and could severely throw off competition. It claims new nuclear plants would be likely to be built without such subsidies by either 2027 or 2030.

But West Somerset MP Ian Liddell-Grainger told the County Gazette: “The European Union just wants to interfere with the British energy strategy and see the 'lights go out' in Britain.

“As for sitting around and waiting for other companies to build without such subsidies, that's twaddle.

“Nuclear is something we need to secure now, not just wait for someone to come along - or we could be waiting forever.”

Under a deal struck in October, EDF and partners will be guaranteed a price of £92.50 - twice the current market price of electricity - for each megawatt-hour of power the reactors generate over 35 years. The subsidies will be funded through levies on all consumer energy bills.

The Treasury has also offered a credit guarantee to underwrite up to £10 billion of debt on the project.

There were fears the investigation by the Commission could further delay the project, which is already five years behind schedule.

But Chris Langdon, Somerset Chamber of Commerce's project manager for the Hinkley Supply Chain team, said confidence in nuclear was still high.

He said: “We knew this investigation was coming. I feel confident about the project's future. More than 1,550 Somerset businesses have already signed up with the supply chain to identify contract opportunities for the project.”

A spokesman for EDF said the investigation was expected and came as part of energy market reforms for the UK.

He added: “This step will be followed by a one-month consultation. The contract for Hinkley Point C is the first example of a new kind of agreement to unlock investment in low carbon energy. It is right that the Commission should investigate the far-reaching market reform which makes this and future contracts possible.

“EDF will co-operate fully with the European Commission and UK Government as the investigation proceeds.”

Meanwhile EDF is launching a series of joint initiatives to boost the UK's involvement in the nuclear industry.